FE Fashionable BFSI Summit 2022: Banks stronger now, to assist stability sheet expansions once more, says CEA Nageswaran

India’s banking system is now well-capitalised with NPA ratios down, due to a sequence of capital infusions, asset gross sales, stability sheet provisioning and regular nominal development, chief financial advisor Anantha Nageswaran mentioned on Friday.

Referring to the so-called “twin stability sheet drawback” that began within the early years of the brand new millennium, he mentioned whereas it let the conomy develop at excessive charges for a couple of years to 2008, additionally sowed the seeds of subsequent slowdown.

Corrective steps taken since could have slowed development however made the monetary system stronger. “(The capital adequacy ratio) of Indian banks is on a par with friends in lots of developed and growing international locations. When present uncertainties dissipate, that is goes to face us in good stead to broaden stability sheets as soon as once more,” Nageswwaran mentioned on the FE Fashionable BFSI Summit right here.

“Within the final three months non-food credit score development is working at double digits. Whereas that’s a great signal, the majority of the loans goes to micro and small enterprises and private mortgage section. Giant enterprises naturally are nonetheless cautious and up to now that they had different avenues of borrowing as properly. Due to this fact, the state of the banking system is that the pandemic shock has been weathered by them. Some lagged influence could be within the pipeline, however provisioning ought to deal with that.”

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